Airbus launches upgraded A330

European planemaker Airbus has launched the eagerly-awaited upgrade of its long-haul A330 passenger jet - the A330neo - to meet rising demand for cheaper, more fuel-efficient travel.

The decision to upgrade the A330 with new Rolls-Royce engines was announced on the first day of the Farnborough airshow, a key biennial event in the aviation calendar held near London which sees Airbus battle with rival US giant Boeing for orders.

ALC has also signed a memorandum of understanding (MOU) to be the launch customer of the Airbus A330-900neo by buying 25 of the wide-body aircraft. Together the deals are worth a potential US$14.1 billion (A$15.26 billion).

Boeing announced meanwhile that British low-cost carrier Monarch Airlines was finalising terms for 30 of its 737 MAX 8s worth US$3.1 billion (A$3.35 billion), marking the start of a fleet transition to the US group's single-aisle planes from Airbus jets.

"The 737 is the backbone of our fleet and has fuelled our growth with its proven reliability and efficiency," Okay president Liu Weining said in a statement.

Brazilian group Embraer, the world's third largest commercial planemaker, said it had won an order worth US$2.4 billion (A$2.60 billion) for 50 regional jets from US airlines-owner Trans States Holdings.

Airbus said that its A330neo, a rival of Boeing's 787 Dreamliner, will be available in two versions, the A330-800neo and the A330-900neo.

The neo would cut fuel consumption by 14 per cent per seat compared with existing A330s, and deliveries will start in the fourth quarter of 2017, Airbus added.

"The A330 is a very important margin contributor for our group. It's also one of the most reliable and efficient commercial aircraft ever," said Airbus Group chief executive Tom Enders.

"With our decision to re-engine... we will keep the A330 flying high for many more years to come."

Airbus has sold about 1300 A330s, of which the vast majority are still in service since the model's launch in 1993. The group has forecast sales of the A330neo at potentially more than 1000 units.